New York— Wayfair’s CEO, co-founder, and co-chair Niraj Shah discussed the company’s approach at the Morgan Stanley Global Consumer & Retail Conference here: Wayfair wants to maintain its market share in a home furnishings category “that doesn’t have a lot of energy behind it.”
Although the economy as a whole has performed better this year, Shah claimed that the house sector “continues to have a malaise.” The category has been impacted by the stagnation in housing. Although the category lacks vigor, it is also not in danger of collapsing. He said, “It’s kind of bumping along.”
He claimed that in order to gain market share more quickly, Wayfair has concentrated on a few “idiosyncratic drivers,” such as introducing its new rewards program, establishing Wayfair Verified, which evaluates products based on factors like quality, price, ease of assembly, and popularity, improving its delivery program, expanding its marketing channels through social media and influencers, doing more with its Wayfair Professional B-to-B program, and continuously replat forming its core technological systems.
“We have no control over the macro,” Shah stated. “We have control over these.”
Regarding tariffs, Shah stated that it is unlikely that consumer demand will increase as a result of the levies that President-elect Donald Trump has suggested. Instead, he claimed that this holiday season, consumers are searching for deals and value.
Shah claimed that the home furnishings industry is better equipped to handle tariffs than it was in the past. He claimed that tariffs were unexpected by the industry and that they happened rapidly the last time. However, suppliers are now more aware of the location of production. According to him, suppliers have attempted to plan ahead with a great deal of flexibility since they don’t want to react after the fact like they did the last time.
Shah added that Wayfair may change course faster than some competitors because of its wide network of suppliers that work in numerous nations.
“We have 20,000 vendors in our base. Our methodology is inherently flexible, which is a benefit of the marketplace framework we have,” he stated. “Being a traditional retailer makes it more difficult because you have to choose who you source from and then deal with the consequences of that choice.”
Another area of success for the company has been the Wayfair flagship shop in Wilmette, Illinois, which opened in May. According to Shah, the company is experiencing a number of commercial impacts from it.
He stated that the majority of the customers are “new to file,” which means they haven’t been in Wayfair’s current 90 million customer file. “What has happened so far has been quite fantastic,” he remarked.
Furthermore, he said that it has adopted a new perspective on sales, encouraging clients to collaborate with associates who use iPads to generate lists or use a phone app to make a basket and place online orders, rather than relying on in-store purchases.
According to Shah, there are several ways to measure the halo effect, including tracking orders placed by customers who shared their information in-store or online later, comparing the geographic trade area surrounding the store to artificial twin markets with comparable topographies, or comparing Illinois sales from two years prior to and following the store’s opening.
He remarked, “The halo has been pretty strong.” “The store has been doing really well right out of the gate, and there is still a lot of room to optimize how it performs.”
Consequently, he continued, Wayfair is preparing a site for a new retailer.